25 Fla. L. Weekly Supp. 188a
Online Reference: FLWSUPP 2502NOVOInsurance — Personal injury protection — Coverage — Medical expenses — Statutory fee schedules — Clear and unambiguous election by insurer — PIP policy providing that insurer will pay 80% of reasonable charges and also providing that in no event will insurer pay more than 80% of No-Fault Act schedule of maximum charges commingles language from “permissive” and “reasonableness” methods of reimbursement and does not provide clear and unambiguous notice of intent to limit reimbursement to permissive statutory fee schedule
HUMANITY HEALTH MEDICAL CENTER, a/a/o Rogelio Novo, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INS. CO., Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 2014-005108-CC-25 (03). April 16, 2017. Patricia Marino-Pedraza, Judge. Counsel: Adam Saben, Shuster & Saben, Jacksonville, for Plaintiff. Carlos Carmona, Bronstein & Carmona, Fort Lauderdale, for Defendant.
ORDER DENYING DEFENDANT’S MOTIONFOR SUMMARY JUDGMENT and GRANTINGPLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
THIS MATTER comes before this Court for hearing on April 3, 2017 on Plaintiff’s and Defendant’s Cross-Motions for Summary Judgment as to whether State Farm properly elected the permissive payment methodology of section 627.736(5)(a)1, Florida Statutes (2012), in the language of Policy Form 9810A. Having been fully advised after reviewing the file, hearing the argument of counsel, and considering relevant case law, the Court finds as follows:
This court previously ruled that State Farm’s 9810A policy failed to make a clear and unambiguous election to calculate reimbursements pursuant to the “permissive” payment methodology in Manuel V. Feijoo, M.D. a/a/o Josefina Bacallao v. State Farm Mut. Auto. Ins. Co., Miami Dade County Case No.: 15-2825 SP 25 (Order of November 30, 2016) [24 Fla. L. Weekly Supp. 863a]. In that case, following the precedent of Geico v. Virtual Imaging Services, 141 So. 3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a], this Court found that the relevant language of State Farm’s policy, when read as a whole commingled language from both the “permissive” and the “reasonableness” methods. On page sixteen of the 9810A policy, State Farm’s policy reads:
“We will limit payment of Medical Expenses described in the Insuring Agreement of this Policy’s No-Fault coverage to 80% of a properly billed and documented reasonable charge, but in no event will we pay more than 80% of the following No-Fault Act “schedule of maximum charges” including the use of Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services. . .” (emphasis in original).
However, in the “Definitions” section of the 9810A policy on page five, the Defendant defines “Reasonable Charge”, which states:
Reasonable Charge, which includes reasonable expense, means an amount determined by us to be reasonable in accordance with the No-Fault Act, considering one or more of the following:
1. usual and customary charges;
2. payments accepted by the provider;
3. reimbursement levels in the community;
4. various federal and state medical fee schedules applicable to motor vehicle and other insurance coverages;
5. the schedule of maximum charges in the No-Fault Act;
6. other information relevant to the reasonableness of the charge for the service, treatment, or supply; or,
7. Medicare coding policies and payment methodologies of the federal Centers for Medicare and Medicaid Services, including applicable modifiers, if the coding or payment methodology does not constitute a utilization limit.
These factors essentially track those considered by an insurance carrier when opting to pay pursuant to the reasonableness payment methodology as noted in section 627.736(5)(a), Florida Statutes. By opting to include the fact-dependent factors in its definition of “Reasonable Charge” while also attempting to reimburse pursuant to the permissive payment methodology, Defendant impermissibly commingles subsections 627.736(5)(a) and 627.736(5)(a)1. Such commingling runs afoul of Virtual. When an insurance company has properly amended its policy to reimburse pursuant to the permissive payment methodology, the fact-dependent factors of section 627.736(5)(a), Florida Statutes, are irrelevant because the reasonableness of a submitted charge is no longer a factor; the reimbursement amount is defined pursuant to a Medicare fee schedule rather than the factors listed above.
Today, both sides argue that the recent case of Allstate Insurance Company v. Orthopedic Specialists, 2017 WL 372092 (Opinion of January 26, 2017) [42 Fla. L. Weekly S38a] (“Orthopedic Specialists”) support their respective positions. Defendant argues that, pursuant to Orthopedic Specialists, an insurer cannot excise the clause that it will pay “80% of all reasonable expenses” as no insurer “can disclaim the PIP statute’s reasonable expenses coverage mandate.” Orthopedic Specialists, at 9. While this statement is correct, neither the Plaintiff nor this Court take issue with the inclusion of this language in State Farm’s policy. In Orthopedic Specialists, the Florida Supreme Court ruled that Allstate’s PIP policy made a clear and unambiguous election of the permissive method because it advised that “all amounts payable. . .shall be subject to any and all limitations. . .including, but not limited to, all fee schedules.” Orthopedic Specialists, at 3. Since the only fee schedules used as limitations were those contained in the permissive methodology, the insured was on notice that the sole method to calculate reimbursements would be the permissive method. State Farm, however, goes a step further, and opts to define “Reasonable Charge” in the definition section of its policy, which is inextricably tied to the “No-Fault” section. In its “Definitions” section, State Farm reserves the right to consider all of the factors in the reasonableness method. As this court stated previously, this commingling of both payment methodologies fails to make a clear and unambiguous election. The Court in Orthopedic Specialists reiterated its reliance on Virtual. There is no language in Orthopedic Specialists limiting the holding in Virtual to dates prior to July 1, 2012. Therefore, the previous order from this Court is consistent with Orthopedic Specialists and the Court stands by its previous position and ruling on this issue.
When reading Defendant’s policy as a whole, the Court finds that Defendant’s 9810A policy fails to make a clear and unambiguous election to reimburse solely pursuant to section 627.736(5)(a)1, Florida Statutes (2012). Therefore, Defendant’s Motion for Summary Judgment is DENIED and Plaintiff’s Motion for Summary Judgment is GRANTED.
